Various studies show improvement in the employment market and in the manufacturing sector. Dickey’s Barbeque Pit offers a virtual kitchen take out concept to franchisees. Famous Dave’s equates its takeout success during the pandemic to plans the company made three years ago.
The U.S. Census Bureau’s advance Retail Sales Report for July showed an increase of 1.2% compared to June. Sales were up 2.7% from July 2019 but are down 2.1% in the first 7 months of this calendar year. The Estimate for June over May was revised up to 8.4% from 7.5%
The advance sales estimate for foodservices and drinking places in July was up 5.0% compared to June but the estimate for this July is down 18.9% from July 2019. In the first 7 months of this year foodservice sales are down 21.4% from the same period in 2019.
This data comes with some cautions and limitations. First, the Census Bureau bases its advance report on a limited sample and may revise the data with the receipt of a broader sample. Second, the survey covers only restaurants and bars. Not included are hotels, resorts, clubs, employee feeding, schools, colleges, healthcare and military. Finally, some, but not all, of the statistics are adjusted for seasonal variations, holidays, and weekends but not for menu price changes.
Economic News This Week
- Initial-jobless claims totaled 963,000, a decline of 228,000 for the week ending August 8. This marks the lowest number of claims since the pandemic hit and first time weekly claims were less than 1 million during the pandemic. The 4-week moving average totaled 1.25 million, a decline of 86,250.
- Job openings grew to 5.9 million, while hires decreased to 6.7 million in June, per the Bureau of Labor Statistics’ “JOLT” Survey. The June hires were still the second highest in the history of the JOLT study. Also of interest, the number of people quitting their jobs rose to 2.6 million. Economists carefully watch the quits number as some believe serves as an indication of confidence on the part of workers that they can rapidly find other employment if they have not already done so.
- The Producer Price Index for Final Demand increased 0.6% in July. Without the volatile food and energy categories, the PPI was up 0.3%. Compared to 12 months ago, the PPI has declined 0.4%.
- The Consumer Price Index for All Items rose 0.6% in July. For the 12-month period ending in July the index is up 1.0%.
- Manufacturing sector labor productivity decreased at an annual rate of 15.5% in the second quarter. Output fell 47% and hours worked declined 37.3%. These were the largest quarterly declines for these statistics since they were initiated in 1987. Unit labor costs in the total manufacturing sector increased 31.1% in the second quarter and is up 9.4% compared to the same quarter a year ago. These increases were the largest in the series.
- Industrial production improved in July, reports the U.S. Federal Reserve. Total industrial production increased 3.0% in July compared to June. This came after a 5.7% increase in June. But the index remains 8.4% less than its pre-pandemic high in February. All major industry groups rose in July from June. Capacity utilization for manufacturing was 69.2% in July, 9.2 percentage points greater than its trough in April and 5.5 percentage points greater than the its recession trough in 2009.
- The University of Michigan’s preliminary August Index of Consumer Sentiment was virtually unchanged from July. The Index was 72.8 in August, 0.3 points better than July. The Current Economic Conditions Index read 82.5, compared 82.8 in July while the Index of Consumer Expectations also showed less than a one point difference as well with a 66.5 reading in August up very slightly from 65.9 in July.
Foodservice News This Week
- Consumer prices declined 0.4% in July, per the Bureau of Labor Statistics. Prices for food at home declined 1.1% while prices for food away from home increased 0.5%.
- Dickey’s Barbecue Pit now offers virtual kitchens as a franchise operation. The Dickey’s virtual kitchens will offer delivery service only in Chicago, Houston, Orlando and Providence, R.I. Since the virtual kitchen will operate as part of a Dickey’s restaurant the only equipment necessary is a smoker and a warming cabinet.
- Like most full-service restaurants, BBQ Holding’s saw sales decline by double-digits in the company’s last fiscal quarter. One bright spot: to-go sales almost doubled at Famous Dave’s company-owned stores. Famous Dave’s attributes the success to the three years the chain spent developing its to-go system.
- Johnny Rockets is sold to Fatburger’s parent company. Andy Wiederhorn, CEO of Fatburger, had announced that company’s intent to expand with an established, widely recognized chain.
- Kwik Trip had a hiring event with the hopes of adding 3,000 people to its roster. In addition to looking for employees for the Kwik Trip C-Store operation, the company hopes to add staff for its Kwik Star, Tobacco Outlet Plus and Tobacco Outlet Plus Grocery stores.
- Comparable Store Sales Reports: Arcos Dorados down 51.0%. Burger King down 9.9%. Denny’s (domestic system-wide units down 56.9%, company-owned units down 64.9% and franchised units down 56.1%), One Group Hospitality (STK down 81.4% and Kona Grill down 52.8%) and Papa John’s Pizza (North American sales down 28.0%, company-owned units down 22.6% and franchised locations down 29.7%), Popeye’s Louisiana Kitchen up 24.8% and Tim Horton’s down 29.3%.
For details and same store sales of other chains, Please Click Here for the latest Green Sheet.